Strike costly | Labour disruption at Canadian Pacific Railway contributes to inefficient system, says KAP president
A recent strike by 4,800 workers at Canada’s second largest railway has some farm groups demanding a more permanent solution to rail service issues.
Doug Chorney, president of Keystone Agricultural Producers, said a week-long labour disruption at Canadian Pacific Railway and Ottawa’s decision to pass back-to-work legislation illustrates that reliable, efficient rail service is critical.
The strike also served as a reminder that the concerns of rail shippers, including farmers and grain handling companies, should be addressed.
Chorney cited delays in rail car placements, a recent 9.5 percent increase in grain freight rates and Ottawa’s failure to implement recommendations of a Rail Freight Service Review that were made more than a year ago.
Read Also
Interest in biological crop inputs continues to grow
It was only a few years ago that interest in alternative methods such as biologicals to boost a crop’s nutrient…
In a news release, KAP urged the federal government to move quickly to implement recommendations of the Rail Freight Service Review.
“KAP has always expressed concern over the impact that rail transportation has over farmers,” added Chorney.
“Without any true competition, it leaves the agricultural economy, and the Canadian economy as a whole, vulnerable. It also allows the railways to be highly profitable relative to their investment, while offering poor service at excessively high freight rates.”
Ottawa’s handling of the Rail Freight Service Review is raising concerns among farmers and shippers.
The Conservative government launched the review in 2008.
Following a lengthy consultation process, the panel submitted a final report to the federal government in December 2010.
The federal government has since indicated that it supports the review’s “commercial approach” to improving service.
Among other things, Transport Canada said the new approach should include:
- better advance notice of service changes that affect rail shippers
- the use of service agreements that are negotiated between shippers and railways on a commercial basis
- a fair, timely and cost-effective way to resolve service disputes
- better ways to monitor and report supply chain performance by shippers and railway companies
Last year, Transport Canada announced plans to establish a Commodity Supply Chain Table designed to give rail shippers a forum to discuss rail service but it is not expected to meet until more background work has been completed.
It also appointed former Alberta cabinet minister Jim Dinning to facilitate discussions between railway companies and shippers but sources involved say it has failed to find a consensus between railway companies and shippers.
Liberal MP Ralph Goodale has criticized Ottawa’s policies on rail shipping. He acknowledged rail service for agriculture has improved, but he attributed it to changes in management at Canadian National Railway and concerns among railway companies that new legislation affecting railway operations may be introduced.
“With the threat of (legislation) hanging in the air, the railways have pulled up their socks a bit,” Goodale said.
“But I’m concerned that the longer this (Rail Freight Service Review) process takes, the less likely it is that something meaningful will happen. The railways are certainly lobbying furiously against any kind of legislation or regulatory framework having to do with service delivery.”
But agriculture minister Gerry Ritz said the Dinning facilitation process is ongoing and that work is continuing within the agriculture sector to ensure that the concerns of farmers and shippers are addressed.
Pulse Canada is also working on a prototype level of service agreement that has generated positive feedback from agricultural stakeholders and other rail shippers, Ritz added.
When completed, the prototype could serve as a template for commercial contracts that spell out shipper responsibilities, railway responsibilities and potential penalties for failing to live up to responsibilities.
Greg Cherewyk, a Pulse Canada executive who sits on two subcommittees of the crop logistics group, said work is progressing on the prototype service agreement and other key issues. Producer car shippers have already been consulted and a report on issues affecting producer car use has been completed.
The report will be presented to the federal government soon.
Work is also continuing at measuring railway performance in key areas such as order fulfillment, rail car placements and transit times.
“Ultimately, we want to end up with something that says for the grain industry … here are the things that we want measured,” Cherewyk said.
